I received positive feedback from a friend who found my post on revenue management in hospitality helpful with what he does. That means a lot to me since he is one of my best friends and sharing is one of the biggest reasons why I spend time and money on this endeavor. So I decided to write a bit more about hospitality, from my own experience. This time is about private sale in hotel chains.
Every hotel chain wants to keep guests in its loyalty program. Membership makes guests drawn more towards the brand when booking decisions loom. If you are in Marriott’s loyalty program, you are more interested in staying at Marriott properties to accumulate points and enjoy perks, if possible. To keep guests exclusive on its program and out of its competitors’, a chain needs to offer exclusive benefits. Private sale is one way to do so.
Before we go into the details of a private sale, it’s important to be aware of different rates a hotel can offer for a room on a certain date. Below is what I learned from working for Accor Hotels. I suspect that it will be the same for other chains, at least in principles.
Following the screenshot above, it’s normal to see a few rates on a website when you book a room. The lowest one in Accor Hotels system is called R03 (Stay Longer and Save in the screenshot) while the Flexible Rate is called R01 (Flexible Rate). R03 rates are about 15% cheaper than R01 rates, but come with more restrictions such as no cancellation or no refund. B&B rates such as the last one in the screenshot are usually R01 rates plus breakfast.
A sale promotion from Accor Hotels is usually 2 weeks and can go up to 50% discount on normal rates. On the first day of the promotion, information on the sale is sent out to strictly Accor Members only. In the following 7-8 days, information will be shared with both Accor Members and Subscribers. Bookings can only take place on Accorhotels.com. After that, information will become public on online travel agents such as Booking.com or Expedia. If you are an Accor member, discount can go up to 50%. An Accor subscriber or non-member and indirect channel guests such as those on OTAs can enjoy 40% discount. That way, guests are more motivated to become members or subscribers of Accor Hotels in order to receive exclusive benefits.
Discount is applied to R01 rates, the higher tier as mentioned above, with the restrictions of R03 rates. That way, participating hotels in the program don’t ruin their Average Daily Rates or RevPar too much. On that point, if your property is in a hotel chain, you can opt in or out of a sale, depending on the state of your property. For instance, it makes no sense to participate in a sale if your hotel has high occupancy already and is expected to pick up more. Otherwise, a sale can be a good tool to fill up the rooms.